Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 12, Problem 12E
a.
To determine
Determine the amount of partner bonus.
b.
To determine
Record the
c.
To determine
Explain reason for which bonus is paid now.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Admitting New Partner With Bonus
Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $56,000 and $73,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $35,000.
a. Determine the recipient and amount of the partner bonus.$
b. Provide the journal entry to admit Solano into the partnership. For a compound transaction, if an amount box does not require an entry, leave it blank.
c. Why would a bonus be paid in this situation?
Apparently, Jenkins and Tanner value offered by…
Admitting New Partner With Bonus
Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $56,000 and $73,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $35,000.
a. Determine the recipient and amount of the partner bonus.$fill in the blank 18d33bf9f062f88_1
b. Provide the journal entry to admit Solano into the partnership. If an amount box does not require an entry, leave it blank.
- Select -
- Select -
- Select -
- Select -
- Select -
- Select -
- Select -
- Select -
Admitting new partner with bonus
Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the
tangible assets have been adjusted to current market prices, the capital accounts of Jenkins and Tanner have balances of $66,000 and $86,000, respectively.
Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills
useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $41,000.
a. Determine the recipient and amount of the partner bonus.
b. Journalize the entry for the admission of Solano into the partnership. If an amount box does not require an entry, leave it blank.
Cash
Cody Jenkins, Capital
Lacey Tanner, Capital
Valeria Solano, Capital
c. Why would a bonus be paid in this situation?
Apparently, Jenkins and Tanner value
offered by Solano.
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1PEACh. 12 - Prob. 1PEBCh. 12 - Prob. 2PEACh. 12 - Prob. 2PEBCh. 12 - Prob. 3PEACh. 12 - Prob. 3PEBCh. 12 - Prob. 4PEACh. 12 - Prob. 4PEBCh. 12 - Prob. 5PEACh. 12 - Liquidating partnerships Prior to liquidating...Ch. 12 - Prob. 6PEACh. 12 - Prob. 6PEBCh. 12 - Revenue per employee Niles and Cohen, CPAs earned...Ch. 12 - Prob. 7PEBCh. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Statement of members equity, admitting new member...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Liquidating partnershipscapital deficiency Lewis,...Ch. 12 - Prob. 21ECh. 12 - Prob. 22ECh. 12 - Statement of partnership liquidation After closing...Ch. 12 - Prob. 24ECh. 12 - Prob. 25ECh. 12 - Revenue per professional staff The accounting firm...Ch. 12 - Prob. 27ECh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Statement of partnership liquidation After the...Ch. 12 - Prob. 6PACh. 12 - Prob. 1PBCh. 12 - Prob. 2PBCh. 12 - Prob. 3PBCh. 12 - Prob. 4PBCh. 12 - Statement of partnership liquidation After the...Ch. 12 - On August 3, the firm of Chapelle, Rock, and Pryor...Ch. 12 - Prob. 1CPCh. 12 - Prob. 3CPCh. 12 - Prob. 4CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- sarrow_forwardRequired information Important Note! Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. [The following information applies to the questions displayed below.] ** Ramer and Knox began a partnership by investing $68,000 and $102,000, respectively. During its first year, the partnership earned $205,000. Prepare calculations showing how the $205,000 income is allocated under each separate plan for sharing Income and loss. Important Notel Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. 1. The partners did not agree on a plan, and therefore share Income equally Ramer Knox Show Transcribed Textarrow_forwardS. Stephens and J. Perez are partners in Space Designs. Stephens and Perez share income equally. D. Fredricks will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $100,000 and $139,000, respectively, prior to the revaluation. Show me your work. How do you provide the journal entry for the asset revaluation.. How do you provide the journal entry for Fredricks’ admission under the following independent situations 1.Fredricks purchased a 20% interest for $50,000. 2.Fredricks purchased a 30% interest for $125,000arrow_forward
- L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $96,000 and $40,000, respectively, prior to the revaluation.a. Provide the journal entry for the asset revaluation.b. Provide the journal entry for Ortiz’s admission under the following independent situations:1. Ortiz purchased a 20% interest for $20,000.2. Ortiz purchased a 30% interest for $60,000.arrow_forwardPlease include the process to get the answers so I can learn thank youarrow_forwardRequired information Important Notel Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. The following information applies to the questions displayed below] 5 Ramer and Knox began a partnership by investing $68,000 and $102,000, respectively. During its first year, the partnership earned $205,000. Prepare calculations showing how the $205,000 income is allocated under each separate plan for sharing income and loss. O Important Note! Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. 2. The partners agreed to share income and loss in proportion to their initial investments. Net Income is $205,000. (Do not round Intermediate calculations.) A $68.000/5170 000 Fraction to Allocate Ramers Share Fraction to Allocate Knox's Share of Total Income Allocated Show Transcribed Text Iarrow_forward
- Adax Designs Services is a partnership with Adam and Max as partners. The partnership has been operating successfully for a number of years now. The partners have a written partnership agreement. The following information was extracted from the accounting records of Adax. Design Services for the financial year ended 28 February 2021: Balances in the ledger as at 28 February 2021 R Land and buildings at costAccumulated depreciation: buildingsEquipment at carrying amountDebtorsCapital- AndileCapital- SiphoCurrent account- Andile Credit balance (1 March 2020)Current account –Sipho – Debit balance (1 March 2020Drawings – Andile: GeneralDrawings – Sipho: GeneralNet profit for the year ended 28 February 2021 835 000(65 000)270 000103 000400 000300 00040 00020 000130 000102 000800 000 The following must still be taken into account: 1. The partnership agreement makes provision for the following:• Interest on capital must be provided at 12% per year on the balances in the capital…arrow_forwardJane and Kathy are joining their separate business to form a partnership. Cash and non-cash assets are to be contributed for a total capital of P300,000. The non-cash assets are to be contributed and liabilities to be assumed are as follows: Jane Kathy Book Value Fair Value Book Value Fair Value Receivable Inventories Equipment Payable P 22,500 22,500 37,500 11,250 P 22,500 33,750 30,000 11,250 P 60,000 67,500 7,500 P67,500 71,250 7,500 The partner's capital accounts are to be equal after all contributions of assets and assumptions of liabilities. Determine the total assets of the partnership.arrow_forwardCan you work this problemarrow_forward
- Hello I need help with this accounting problem.arrow_forwardSubject - account Please help me. Thankyou.arrow_forwardI have a scenario where a partnership is forming. The equipment was origially valued at $41000 with the accumulated depreciation on equipment at $22100 for Partner A and 27000, 10100 for Partner B.THey later agree on Equipment as being valued at 23000 for Partner A and 13800 for Partner B. How can you calculate the depreciation without the number of years provided for the life of the equipment? I tried to get this done in a chat but was disconnected. I thought that if I setup the balance sheet I would be able to derive the depreciation based on the shortfall. Partner A Partner B Dr Cr Dr Cr Cash $ 13,000.00 $ 11,000.00 Acc. Rec $ 16,000.00 $ 24,000.00 Allowance for doubtful accts. $ 2,800.00 $ 4,000.00 Inventory $24,500.00 $16,900.00 Equipment $ 41,000.00 $ 27,000.00 Accum. Depr.-Equip $22,100.00 $10,100.00 Notes Payable $ 16,600.00 $ 13,800.00 Accts…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,